Budget Stalemate Hurting California Businesses

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(Sacramento, CA)
Thursday, August 21, 2008

Tina Reynolds owns Uptown Studios – a marketing company in Sacramento. 30% of her business is with the state. Reynolds says state lawmakers don’t realize how much the budget deadlock is hurting companies like hers. 

"It puts us in such a bind. And where is their bind to their constituents? It’s like, they can’t feel it."  

Like other state contractors, Reynolds hasn’t gotten paid by the state in nearly two months. 

"This is already on top of a bad economy. The hardship that it’s putting on every small business that has any size contract with state agencies is huge when it goes on longer than a month."

The state pays about $9 billion a year to contractors from large corporations to small business. 

Under California law, the State Controller is prohibited from cutting checks to most contractors for goods and services provided after July 1st, when the state’s new fiscal year begins.